ILLICIT LEAF TRADE UP - DPP TARGETS TOBACCO

GROWING illegal tobacco is more profitable than marijuana,
Australia's top prosecutor has revealed.

Commonwealth Director of Public Prosecutions, Damian Bugg QC, says
there has been a marked increase in the number of prosecutions of
people for selling black-market tobacco, otherwise known as
``chop-chop''.

``The indications are that chop-chop is a burgeoning industry which
promises greater profits than growing cannabis and is seen to involve
less risk,'' Mr Bugg said. ``Many of the cases referred to the DPP
have involved the evasion of over a million dollars worth of excise.''

Australian tobacco growers, mostly around Mareeba in Queensland and
Myrtleford in Victoria's Ovens Valley, can make up to $900,000 a year
cultivating illicit leaf.

Growers legally produce about 180 bales a year (5250kg), which they
sell to tobacco companies for about $170 a bale. The Federal
Government tax on a bale is $8900, which has resulted in a
black-market price of about $5000 a bale, more than 29 times the
legal price.

Mr Bugg said the more serious cases were prosecuted under the
Commonwealth criminal law and carried penalties of up to 10 years in
prison.

The rush of cases came after the Australian Tax Office (ATO) took
over the full investigation of the illegal tobacco trade from Customs
in May.

``Queensland and Victoria, being the main tobacco-growing regions,
have seen the bulk of the cases,'' Mr Bugg said. ``In the first six
months of last year, DPP Melbourne received four new excise cases.

``In the second six months there were 35 new cases in the office.''

The growers of illicit tobacco are not the only culprits.

Significant amounts of counterfeit cigarettes are smuggled into
Australia every year.

The illegal trade in cigarettes costs taxpayers about $500 million a
year in unpaid excise, with an average packet of cigarettes
attracting a tax of about $7.50.

The May Budget papers revealed the $500 million drop in excise and
put part of it down to the success of the anti-smoking drug Zyban and
the rest down to illegal tobacco, the full cost of which does not
show up.